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Allied Wheat Buying in Relationship to Canadian Marketing Policy, 1914–18

Published online by Cambridge University Press:  07 November 2014

Mitchell W. Sharp
Mitchell W. Sharp*
Affiliation:
Winnipeg
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Extract

At the outbreak of war in August, 1914, plans to cope with a possible food scarcity in the Allied countries were of a rudimentary character. For example, in the War Book of the British Government, there was only one measure dealing directly with food, and that a measure for obtaining information. In France the only legislation on agriculture or foodstuffs existing at the outbreak of war was a law of the period of the Revolution, dating back to July, 1791, which authorized the fixing of retail prices for bread and meat. Hence, methods of procedure had to be improvised as difficulties arose and it was not until well on towards the close of hostilities that anything like a comprehensive food policy had been devised.

As the central foodstuff in the diet of the peoples of the western Allied powers, bread came to play a leading role in the development of food policy. In the words of the body that was later to dominate world import trade in wheat, bread was “the only diet which sufficed in isolation and was therefore, indispensable.” Other foods might fail or be in short supply, but starvation seemed a long way off so long as there was enough bread. In the United Kingdom an implicit “breadstuffs policy” underlay the whole structure of food policy. Though never expressed in any one document, that policy has been stated in these words: whatever else was allowed to be in short supply, whether for human or for animal consumption, there should be a sufficiency of breadstuffs to meet in full all demands for them without rationing. In the other European Allied countries the direction of policy is not so clear but, with surprising unanimity, efforts were directed to keeping bread cheap and plentiful.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 6 , Issue 3 , August 1940 , pp. 372 - 389
Copyright
Copyright © Canadian Political Science Association 1940

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References

1 The compendium of measures, prepared in advance for dealing with all the main problems that were expected to face the government on the outbreak of hostilities. On this point and on the development of British food policy during the war period, SirBeveridge's, William British Food Control (Economic and Social History of the World War, British Series, 1928)Google Scholar has been consulted freely. General acknowledgment is hereby given.

2 Hazen, N. William, “French Wartime Control of Agriculture” (Foreign Agriculture, Jan, 1940 Google Scholar, issued by United States Department of Agriculture).

3 First Report of the Royal Commission on Wheat Supplies, 1921, p. 9.Google Scholar

4 Crop years run from August 1 to July 31.

5 See Appendix to The International Wheat Situation by the Secretariat of the Wheat Advisory Committee, Jan. 8, 1938.

6 Bread subsidies had been adopted throughout Europe by the end of the war so that the price of domestic and imported wheat was not reflected directly in the price paid by the consumer for bread. Nevertheless, the cost of bread to the nation as a whole was affected by the cost of imported wheat.

7 A full discussion of French wheat policy is given by Pinot, Pierre, “Food Supply in France during the War” in Augé-Laribé, and Pinot, , Agriculture and Food Supply in France during the War (Economic and Social History of the World War, New Haven, 1927).Google Scholar

8 A Departmental Committee on Food Prices in the United Kingdom, reviewing this buying, pointed out in its report of November 15, 1916, “that the long rise in prices was practically at an end before this agent began to buy … and prices were actually falling while some of his purchases were being made. This satisfactory development was largely due to the conclusion of arrangements with the Allied Governments whereby competition in purchasing was avoided.” Quoted in Beveridge, , British Food Control, p. 14.Google Scholar

12 “Wheat and War, 1914-18 and Now,” p. 87.

13 First Report of the Royal Commission on Wheat Supplies, p. v.

14 Beveridge, , British Food Control, p. 23.Google Scholar

16 Ibid., p. 28.

16 “Wartime Control of Food in the United States” (Encyclopedia Britannica, ed. 14, vol. XXIII, p. 335).Google Scholar

17 In his book on The Grain Trade during the World War (New York 1928)Google Scholar, F. M. Surface makes the curious statement that the “pyramiding of prices caused by the competitive scramble to secure wheat supplies in the spring of 1917 brought home to the Allied countries the futility of continuing such competitive purchases,” At that time, of course, competition had been largely eliminated as the Wheat Executive was buying wheat for the United Kingdom, France, Italy, and probably also for Greece and Portugal. A similar statement is to be found in the annual report of the Winnipeg Grain Exchange for 1916-17.

18 Purchases of Australian wheat by the Commission as agent for the Wheat Executive during the war years included 500,000 tons in October, 1916, and 3,000,000 tons in April, 1917. The bulk of this remained unshipped until the end of the war and a resident Commissioner was appointed in December, 1917, who spent most of his time combating insects which threatened to destroy the accumulated stocks. After the close of the war on July 3, 1919, another 1,500,000 tons were sold to the British authorities.

19 First Report of the Royal Commission on Wheat Supplies.

20 The text of the resolution from the Canadian Council of Agriculture to Sir George Foster was reproduced in the Grain Growers' Guide of March 21, 1917, as follows:

Respecting the matter of fixing or guaranteeing a price for the surplus crop of Canadian wheat, for the year 1917, discussed with you at your request, in Ottawa on March 3, by representatives of the Canadian Council of Agriculture, your suggestion that a price be fixed about $1.30 per bushel, basis 1 Northern, Fort William, for the entire crop, was considered by the full meeting of the Council here today, and after full deliberation upon the matter, the Council, having in view the present high cost of production, believe that to insure the maximum production of wheat for the coming year, it is advisable to fix a minimum price covering all of this year's crop, and this Council therefore recommends that a minimum price at Fort William of $1.50 per bushel basis 1 Northern grade, be guaranteed, and that a maximum price of $1.90 basis 1 Northern, Fort William, be fixed. Spreads in price on grades lower than 1 Northern to be fixed on the actual difference in value between such grades as determined by milling and baking tests, or, if a flat price be decided upon, such price should be $1.70 per bushel, basis 1 Northern, Fort William, this being less than the average price of 1 Northern at Fort William during the last six months.

21 Accounts of the market situation which led to the withdrawal of the May and July futures are to be found in the following: Operations of the Board of Grain Supervisors for Canada, June 11, 1917, to January 31, 1920, pp. 3, 4, and 5; Ninth Annual Report of the Winnipeg Grain Exchange; Interim Report No. 2 of the Georgian Bay Canal Commission, 1918; Minutes of Evidence of Dr. Robert Magill before the Select Standing Committee on Agriculture and Colonization, April 25 and 26, 1922.

22 H. W, Wood, a member of the Board and President of the United Farmers of Alberta, gave an account of how wheat prices were fixed in an article appearing in the Grain Growers' Guide of October 3, 1917. Shortly after the formation of the Board prices began to rise sharply. “Our board being in session at this time felt in duty bound to check the unjustified manipulation of the markets, notwithstanding we had fully intended not to fix prices till the 1917 crop began to run. To this end we put a maximum price of $2.40 on the Canadian wheat, believing that it was only a matter of a very few days until the United States would be ready to co-operate with us by protecting the market on the other side. In this we were disappointed and the price of wheat over there being uncontrolled, was rapidly pushed up beyond the $3.00 mark.” When the U.S. Food Control Act was finally passed there was a prospect that the price would be fixed at $2.00 in that country and the market sagged to around that level. “Our board felt that inasmuch as we had put a maximum price on our wheat and held it down while wheat had gone higher in the States it would be nothing more than right to hold our wheat up to the maximum until the United States board took final action in setting the price. Consequently we made $2.40 a minimum as well as a maximum price.”

23 F. M. Surface comments on the Chicago corner as follows: “The demoralization of the market due to this ill-considered, panicky action of the Allies was now working to their disadvantage and made them all the more willing to enter into agreements which would give them some assurance of supplies” (The Grain Trade during the World War, p. 185).

24 “Wheat and War, 1914-18 and Now,” p. 87.

25 See foot-note no. 11 (supra, p. 375).

26 First Report of the Royal Commission on Wheat Supplies, p. 27.

27 Wood, H. W. in the Grain Growers' Guide of October 3, 1917 Google Scholar: “I think this price ($2.25) was pretty well fixed in the minds of the different members of the board before the adjournment of our first meeting.”

28 One important consideration in the agreement to fix prices at the same level was the fact that the United States Government was assisting in the financing of British purchases of Canadian wheat.

29 Surface, , The Grain Trade during the World War, p. 64.Google Scholar

30 The Canadian Grain Trade (Toronto 1932), p. 60.Google Scholar H. W. Wood, in the article already quoted, argued that the Canadian action in fixing a price of $2.40 for the balance of the 1916 crop influenced the United States authorities in raising their price above the $2.00 mark for the 1917 crop. See also foot-note, no. 22 (supra, p. 383).

31 Operations of the Board of Grain Supervisors for Canada, June 11, 1917 to January 31, 1920, p. 8.

32 Unless, of course, the presence of James Stewart of the Wheat Export Company of Canada on the Board of Grain Supervisors influenced the decision in Canada.

33 Operations of the Board of Grain Supervisors for Canada, p. 24.

34 Ibid., p. 26.

35 On March 1, 1917, the October future was trading at $1.45 per bushel and rose steadily until, on May 15, it was trading at $2.35.